The upcoming consumer duty would be such an example, although Roe says there is nothing that the duty can be compared to.
“There’s nothing we can refer back to and say, ‘this is what we did last time’. The closest we have is the FCA’s Treating Customers Fairly initiative, which came out in the early to mid-2000s. This is more than that.”
Consumer duty and product value
Once lenders start implementing the consumer duty, one outcome that advisers can expect to see is a product value document, according to Roe.
“One of the things that we’re working on at the moment with our colleagues at the Association of Mortgage Intermediaries, the Building Societies Association and IMLA, is a product value document.
“So this will be a document that all products, providers and manufacturers will use that will just explain to the broker community, the distribution network, how that product represents value for the intended target audience, and who that audience is.
“We will see lenders start to ask the distributors for more information around things like complaints.
“They’ll be asking for more information around their levels of commission so that those manufacturers, when they’re looking at that product value chain can make sure that – whether it’s commissions, the fees that are being charged – throughout the chain represent good value for borrowers.”
As Roe puts it, lenders work very closely with brokers, and “neither could survive without the other”.
So in addition to working with lenders at UK Finance, Roe says he is fortunate in being able to see both ends of the market as a non-executive director of the broker network Stonebridge as well.
“I get to see the product development, the challenges that the large lenders have; but also I get to see the sales side as well. And making sure that those customers get a good outcome, and understanding issues that we face in terms of complaints right at the grassroots.”
One concern that Roe has regarding the consumer duty however, is the possibility of a grey area existing between now and July.
“[A] concern I have is that in hindsight if customers complain, we find that actually what happens there is that firms, in this intervening period between the consumer duty being announced and the implementation period, that actually there’s this little grey area [where] the rules weren’t in place until July, but actually firms should have been mindful of [them] when they’re dealing with complaints, or when they’re developing products.
“We don’t want retrospective regulatory approaches.”
